There are more property investment articles, commentaries and analyst reports on the Web every week than anyone could read in a month. Each Saturday morning I like to share some of the interesting ones I’ve read during the week.
Enjoy your weekend….and please forward to your friends by clicking a social link buttons on the left.
20 Tips to get your property loan – Mark Bouris
While lenders are currently falling over themselves to lend property investors funds, Mark Bouris, head of Yellow Brick Road, shared these tips on how to maximise your attractiveness to lenders in Property Observer:
1. Have a clear goal: Use online calculators to see what you need to save and how much the repayments will be.
2. Have a budget and a plan: you need a deposit and to reduce your weekly outgoings. You need to do this for at least six months.
3. Save a deposit: bigger is better.
4. Show consistent savings: lenders want to see evidence of good financial management, rather than windfalls. Use a separate savings account to make regular deposits and few withdraws.
5. Have stable and consistent income: lenders are generally less comfortable lending to someone who has had numerous jobs or long gaps between employment.
6. If you do change jobs, stay in the same field and show increased income. Apply for your mortgage before changing employers or starting a business.
7. Understand your budget: lenders will want to know your gross income, and your financial and living expenses to gauge your disposable income.
8. Know that most lenders credit-score you to get an idea of how much risk you pose. So you must minimise credit enquiries, job changes and changes of address.
9. Have a stable rental history and minimise moving houses or apartments.
10. Lower your limits on credit cards: every $1 of credit card limit stops you borrowing up to $5 of home loan. Reduce credit cards to one, and reduce that card’s limit to what you use. Pay-off and cancel the credit card if you can.
11. Stop applying for credit/store cards: it suggests you live outside your means.
12. Don’t take ‘interest free period’ store finance.
13. Ensure your bank accounts are in order. No late payments, over-limits, or overdraws.
14. Know your credit report: You can buy your Veda credit file at www.mycreditfile.com.au
15. If you’re self-employed, get your taxes done before applying and make sure there’s no tax owing on your ATO account.
16. Reduce overheads: fancy car leases, big smart phone plans and cable TV charges can reduce your net income and affect your serviceability.
17. Move in with mum and dad if you can, but only if you’re going to save!
18. Talk to a broker.
19. Don’t apply for too many mortgages. This affects your credit scoring.
20. Don’t lie to lenders, especially about other loans or credit cards.
7 Ways you could lose money in property | The top 5 property investment questions | Significant changes to the way banks assess you
Another great Real Estate Talk show produced by Kevin Turner. If you don’t already subscribe to this excellent weekly Internet based radio show.
Details of this week’s show:
I share 7 ways you could lose money in property
Brad Beer from BMT Tax Depreciation answers a question about having to pay back depreciation claimed on a property when it is sold
Mark Kelman talks about the skillsets you need to develop to become a property millionaire but there is one main ingredient that is the key.
Rachel Barnes runs us through the changes on how a bank will decide on your next loan approval.
You should definitely subscribe to this weekly audio program. Click Here It’s free and you can listen on the go on your smartphone, iPad etc.
No further interest rate cuts? – Pete Wargent
From 1 November 2011 to 6 August 2013, the official cash rate was dropped in stages from 4.75% all the way down to a new low of just 2.50%, where it has remained ever since. Regular Property Update expert Pete Wargent explains in his blog that:[sam id=41 codes=’true’]
A handful of economists continue to believe that the next move is still down, but notably this week Bill Evans of Westpac – a widely respected voice after he called previous cycles more accurately than the majority – switched his view to the easing cycle having now finished.
Although Evans still sees a few challenges ahead for the labour market, the consumer and business investment, he doesn’t see anything to shake the RBA out of its comfort zone for the next 12 months.
The consensus view of the market now appears to be that rates will on hold for some time (perhaps 6-12 months or even longer) before the next move being up.
China facing fresh ‘ghost town’ crisis after developer collapse
There have long been warnings of a property bust in China. These reached fever-pitch in mid-2012 when a bout of monetary tightening caused house prices to fall briefly. But now the Sydney Morning Herald reports China faces the biggest property default on record as credit curbs threaten to break the housing boom, leaving a string of “ghost towns” across the country.
The Chinese newspaper Economic Daily News said Xingrun Properties, in the coastal city of Ningbo, is on the brink of collapse with debts of $US570 million ($627.3 million), mostly owed to banks. The local government has set up a working group to contain the crisis.
“As far as we know, this is the largest property developer in recent years at risk of bankruptcy,” said Zhiwei Zhang, from Nomura.
“We believe that a sharp property market correction could lead to a systemic crisis in China, and is the biggest risk China faces in 2014. The risk is particularly high in third and fourth-tier cities, which accounted for 67 per cent of housing under construction in 2013,” he said.
Nomura said the number of ghost towns has spread beyond the well-known disaster stories of Ordos and Wenzhou to at least eight other sites. Three developers have abandoned half-built projects in the 2.5m-strong city of Yingkou, on the Liaodong peninsular. They have fled the area, a pattern replicated in Jizhou and Tongchuan.
Baby Boomers set to shake up housing.
Perth Now reports analyst IBIS World’s analysis suggesting that the upcoming retirement of baby boomers will make a big impact over the next few years.
The property market, travel industry, retirement housing and financial advice would be the sectors to get the biggest boost, IBIS World said.
In WA, baby boomers make up 21 per cent of population, according to the group’s research.
About 76 per cent in the 45-54-year-old bracket Australia-wide own their own homes, and 81 per cent in the 55-64-year-old bracket,
While some suggest all these boomers selling up their homes could cause an issue the article then quotes me:
But fears that this group selling their big family homes en masse would create a “market bust” were unfounded, property analyst Michael Yardney said.
The director of Metropole Property Strategists said he agreed Australia was on the crest of a “demographic tsunami”, but didn’t think boomers would sell their homes immediately upon retirement. Many would also want to remain in their same suburbs, close to friends and family.
“Those who do sell up will want to downsize to modern accommodation (much of it which is yet to be built) and won’t have difficulty finding buyers for their properties as developers will snap up their ageing properties to build duplexes and apartments to house the growing population in our middle-ring suburbs,” Mr Yardney said.
19 Horrible Things That Can Happen If You Drink Too Much Caffeine
If you’re like me you enjoy your coffee. But Business Insider warns of some horrible consequences of too much caffeine. I hope you’re not drinking a coffee as you read this list:
- Increased heartbeat
- Heartburn/ Reflux
- Jitters/ Restlessness
- Muscle Twitches and Spasms
- Rambling Thought and Speech
- Heart palpitations
- Gastrointestinal disturbance
- Increase Blood Pressure
- Stomach Ulcers
- Cardiac arrest
- Coma, and worst of all
- Death People with caffeine sensitivities can died from caffeine overdose. While achieving a lethal dose of caffeine would be difficult with regular coffee, high doses with caffeine pills are a known cause of many caffeine overdoses.
Blogs you may have missed this week:
If you didn’t have a chance to read my daily blog, here’s a list of the blogs you missed this week: